In this news, we discuss the Starboard’s Smith calls ACI Worldwide ‘attractive’ takeover target.
BOSTON (Reuters) – Activist investor Starboard Value, who now owns 9% of ACI Worldwide Inc, sees the payments systems company as an “attractive” takeover candidate, hedge fund chief Jeffrey Smith said on Thursday. of a conference.
“ACI looks just as attractive when you compare its current revenue to recent transactions,” said Smith, managing director and chief investment officer of Starboard.
Smith told the Capitalize for Kids Virtual Investors Conference that the company has underperformed its peers, including Blackbaud, Commvault Systems and FireEye, despite its favorable business characteristics and unique collection of assets.
Over the past five years, ACI has returned 37%, far less than its peer group’s 151% gain, Smith said, according to the company’s presentation obtained by Reuters.
Smith noted an “unprecedented amount of payments M&A activity in recent years,” noting that both strategic and private equity buyers have been active. “Paid valuations for recent acquisitions exceed the multiple at which ACI is currently trading,” he said.
ACI’s share price closed at $ 31.55 on Thursday, roughly where it closed on Monday before Starboard said it now owns 10.5 million shares in the Naples-based company , Florida, worth $ 3.7 billion. The company did not comment on Smith’s presentation.
Starboard, which invests around $ 6 billion, is known for its operational know-how and improving state-owned enterprises like Darden Restaurants. Starboard has already won 22 board seats in 2020, including three at peer ACI data management software maker Commvault Systems.
Starboard said there was room for ACI to accelerate organic growth with expanding operating margins and said the new management is taking sensible steps. But Smith and his team also want to hear the details on the next Investor Day and understand if all of the units are critical to the business.
Reporting by Svea Herbst-Bayliss; Edited by David Gregorio
Original © Thomson Reuters